Hotel tax revenue benefits city's promotional efforts

May 7, 2013

The ClubHouse Hotel & Suites on South Louise Avenue is among properties with more than 40 rooms that charge a $2-per-night tax that is used by the Sioux Falls Convention and Visitors Bureau for marketing efforts. / Elisha Page / Argus Leader

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Since the city’s Business Improvement District tax went into effect about two years ago, it has upped the ante in tourism marketing to a level Sioux Falls previously has been unable to offer.

Revenue from the $2-per-night fee for hotels with more than 40 rooms is used by the Sioux Falls Convention and Visitors Bureau for marketing efforts. The tax is expected to generate $1.5 million for this fiscal year, which started in October.

Already this year, the tax is bringing in more than the previous year. October through December saw a 6 percent increase compared with the same period the previous year.

“It is allowing Sioux Falls to be promoted and sold in ways we’ve never been able to do before,” said Teri Schmidt, executive director of bureau.

Besides doing more promotions, Schmidt said the agency is able to provide more incentives for companies looking to book a convention here.

Larger conventions often have to book at multiple hotels, which creates transportation issues for companies. The BID revenue has allowed the visitors bureau to help subsidize the cost of shuttling people to and from events, Schmidt said.

The visitors bureau also recently booked a meeting planners conference for the first time. Part of the bid package was providing $100,000 to pay for the cost of the convention, which is mandatory.

That might seem like a lot, but it will bring 100 meeting planners to the city for four days.

“This will, frankly, be an opportunity for the city to sell itself to these meeting planners in one big hit,” she said. “If we book one conference or convention from one of those meeting planners, it would easily pay for that $100,000.”